First, the dividend and distributions do not represent one month.They are the average of six months.Next PHT has undistributed income of 46 cents which can be used to cover any earmings short-fall for several years.
Does basic math elude you? At a 40% premium you get almost 29% less bonds for your money. Ie, you buy bonds for $100 yielding 5% and only get $71 worth of bonds, your actual yield is only 3.55%. That is why there is no way this dividend is being CURRENTLY earned.
They can use PAST capital gains to call the distributions non-ROC for a little bit, but that can only last so long, the cash flow going forward WILL NOT sustain these payments.
Calm down man. Look, this fund doesn't pay ROC, never has, it has always earned its divy, has lots of UNII, has a good track record. If you are worried about this fund, then you should just get out of high yield CEF's all together and invest in something that yields like 5% or lower.
Agreed. But they are leveraged 28%. They (I think) use the value of their holdings as collateral to borrow money cheap and increase the number of bonds they own. So, using your numbers, aren't they really tying up more than $71 worth of bonds? Maybe not $100 worth, but close?
Funny, when I look at Cefconnect PHT has earned the dividend for the last 12 months. So in fact they are earning the dividend. There is a high premium to this ETF but they do earn the divy. Also the NAV has increased some over the last 12 months, showing that they are not losing through capital loss or dividend overpayment.